What is PageRank penalty?
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Page Rank penalty is go down of PR of websites or blogs. Google updates PR every 3 months and provides PR on the basis of quality and quantity of backlinks.

just simple dear loss your page rank .

During the October 2007 PR update, Google applied a Page Rank penalty to a significant number of low quality directories and other sites suspected of selling links. By way of some background to this, link selling breaks Google Webmaster Guidelines as it is viewed as an attempt to influence the search results to artificially improve ranking.

Sites and directories which were affected by a Page Rank penalty had a few things in common - they all offered paid high PR links and keyword optimized anchor text which were search engine indexable (none used the 'nofollow' attribute). Interestingly, high quality directory sites which didn't allow link anchor text optimization were less badly hit, so it appears that Google was especially concerned about the manipulative affect on its search results caused by optimized high Page Rank links as opposed to links which just used the site name.

means your site page rank getting down.

thanks

You lose the PR of your site and nothing else......

Google had warned for sometime the risks of link selling and it appears that high Page Rank directory sites and other websites which offered 'sponsored listings' to paying clients were hit by Page Rank penalties during the update.

Sites and directories which were affected by a Page Rank penalty had a few things in common - they all offered paid high PR links and keyword optimized anchor text which were search engine indexable (none used the 'nofollow' attribute).

PR penalty means decrease in your website's page rank.